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If you suspect that a company will go bankrupt next year, which would you rather hold, bonds issued by the company or equities issued by the company? Why?

Respuesta :

tutordamola

Answer:

The answer is bonds

Explanation:

In the case of a looming bankruptcy, bonds issued by the company will be preferred.

Bond holders are always paid before equity owners(shareholders) in the case of liquidation. Equity owners are the residual owners and they are always the last set of stakeholders to be chose . Bondholders are being paid periodically (monthly, semiannuallly, quarterly or yearly).

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